Vietnam Reports FDI Surge in Steel Industry

The steel industry in Vietnam is witnessing a surge of foreign direct investment (FDI) with the coming of some global giants from Taiwan, South Korea and India as they see plenty of opportunities in the country.

 

At present, Vietnam has just one steel-sheet factory and its production capacity of steel ingots is low, leaving much room for international players to enter.

 

Taiwan’s Tycoon Worldwide Steel has already received a license from the Vietnamese government for a steel ingot mill project worth more than US$1 billion to produce five million tons of ingots a year when fully operational.

 

The 445-ha factory will be built in eight years in central Quang Ngai province’s Dung Quat Economic Zone. In the first phase, Tycoons will invest $556 million between now and 2009 to construct the mill which is designed to have a capacity of around two million tons of steel ingot a year. In the second phase, the company will invest around $500 million to raise the plant's annual capacity to 5 million tons after it is completed in 2014.

 

Another project is being prepared by Posco of Korea, the world’s fourth biggest steel manufacturer. If licensed, Posco will invest some $1 billion to produce three million tons of steel sheets a year.

 

Posco, which is waiting for a license, plans to spend $340 million initially and the balance later.

 

Sunsteel, another Taiwanese company, has applied for a license to build an even bigger steel mill in the central province of Ha Tinh. The output capacity of the $1.9-billion project would be 4.5 million tons per year.

 

Meanwhile, Vietnam Steel Corp. is in talks with India’s Essar to set up a $500 million joint venture with an annual capacity of two million tons of steel sheets. The proposed location for the mill is Phu My Industrial Zone in the southern province of Ba Ria-Vung Tau.

 

The state-run corporation has wanted this project for a long time but couldn’t proceed before now as its capital was concentrated on the Phu My Steel Mill.

 

Vietnam’s need of steel sheets is growing fast and is projected to reach 4.7 million tons in 2010, 7.2 million tons in 2015 and 10.2 million tons in 2020. Currently, the country imports some 3.5 million tons of steel sheets a year.